Report of the WTO Public Forum, Addressing global environmental challenges: What to expect from future dispute settlement panels? (CIEL/FOEE) (November 2008)

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The trade-environment debate has recently gained center-stage with the overwhelming evidence and the increasing political acknowledgement of the changing climate – possibly one of the most important challenges ever faced by humans. But the debate on the relationship between environment and trade is not new. The debate is long-standing, involving cultural and philosophical differences in approaching environmental/health risks, and sometimes tensions between environmental protection in the North and export interests of countries in the Global South. Still new trade-environment challenges stand on the horizon, and they are unlikely to be resolved in WTO negotiations. WTO dispute settlement may therefore gain on importance, and will be called upon to strike a balance between competing goals and interests.

The discussion amongst lawyers with different backgrounds and perspectives focused on the future of WTO dispute settlement relating to the environment, and asked whether WTO panels and the Appellate Body (AB) are well–equipped to deal with upcoming challenges. It was noted that the AB had developed a real jurisprudence of WTO law and not just a set of inconsistent decisions, and that the AB had assured an important place within the institutional framework of the WTO system. The AB had demonstrated jurisprudential consistency and predictability and never had the AB overruled itself. Thus, a clear trend of the AB was identified towards integrating environmental, developmental and trade considerations. In contrast to certain panels, the AB showed itself sensitive to Members’ environmental policies and regulations, and it was expected that this would continue. In the area of the SPS Agreement, this trend seemed less clear. The discussants agreed that perhaps this would be clarified with the AB’s decision in USHormones (or Hormones II). Indeed, since the discussion at the WTO Forum, the AB rendered its decision in that case and showed, as expected, a much more nuanced approach to the SPSAgreement than the approaches taken by panels in the EC-Biotech and the US-Hormones cases, striking down most of the panel’s findings in the latter.

The speakers agreed that environmental trade restrictions can be a problem for developing countries, but that it might be difficult to resolve that problem through dispute settlement. Rather, the issue should be addressed in the relevant WTO Committees.

The evolution of case law involving the complex inter-relationship between trade and environment will continue to be of importance and needs to stay on the radar screen of anyone interested in environmental protection and sustainable development more generally.

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